The Dunlap Community Unit School District board voted to adopt the fiscal year 2026 budget at its Aug. 27 meeting, approving a deficit plan Superintendent Dr. Dearman described as "the smallest budget deficit in the last five years" while warning that ongoing expense growth risks outpacing revenues.
Dr. Dearman told the board the district has run roughly $1 million annual deficits in recent years and urged members to plan now to avoid a future fiscal crisis. "We need to get out in front of this," he said during a detailed financial presentation that reviewed reserves, revenue drivers and projected capital needs.
The presentation said the district's funding is heavily dependent on property taxes and the state's evidence-based funding model, and that while the district has benefited from recent EBF increases and one-time federal COVID funds, the base revenue share has not substantially changed over 25 years. Dr. Dearman described reserves and a 180-days cash target flagged by the Illinois State Board of Education as important measures for the district's financial profile.
Board members and staff discussed options to close the gap, including a potential tax referendum, working cash fund bonds (which the district's bond advisor said around 75'80% of schools use), or other borrowing. Dr. Dearman said a 30-cent tax increase was one example he analyzed and that working cash fund bonds are a common alternative to raise capital without a permanent tax-rate change.
Several board members asked for a deeper analysis. Board member Tim urged a proactive "deep dive" into expenditures and possible structural cuts; another board member said a small finance committee should reconvene to evaluate scenarios before additional actions. Dr. Dearman agreed a deep-dive review is a reasonable next step but reiterated that large savings would likely require reductions to personnel or programs because 80% or more of district spending is on people.
The board opened and closed a public hearing on the FY26 budget earlier in the meeting and then took the adoption vote. During roll call on the budget adoption motion, Feldman, Paul, Kai Rapoport and Wagoncock voted yes; Holzhauser voted no (roll-call transcript included partial names and votes). Dr. Dearman and finance staff Mike McKenzie presented the budget materials and answered questions about projection assumptions and one-time transfers the district has used in recent years.
The superintendent presented a multi-year projection that included needed capital items not yet funded in the FY26 budget, including HVAC replacements, playgrounds and roof/structural work. Dr. Dearman said some major projects (estimated in prior staff work at roughly $17 million over five years) are not included in the FY26 operating forecast and will require separate planning.
The board adopted the FY26 budget as presented and directed staff to continue analysis and bring further financial options, including the deeper expenditure review several members requested. The motion passed by roll call; board members were reminded to sign the adopted budget document.
Looking ahead, Dr. Dearman and several board members advised moving quickly to assemble analysis and potential policy options so the district can choose between using reserves, borrowing, or seeking voter approval if needed.